SBI reports highest-ever quarterly net profit of Rs 6,504 crore in Q1

State Bank of India (SBI), on Wednesday, reported 55.24 per cent year-on-year increase in standalone net profit at Rs 6,504 crore for April-June quarter (Q1FY22), meeting Street expectations. The net profit in the year-ago period was Rs 4,189.4 crore.

Analysts, on average, projected profit after tax (PAT) to rise anywhere between 33-63 per cent, up to Rs 6,841 crore. READ ANALYSTS’ EXPECTATIONS HERE

Sequentially, the lender’s profit increased just 0.8 per cent from Rs 6,450.7 crore clocked in the March quarter of FY21.

“The bank has registered its highest quarterly net profit of Rs 6,504 crore in Q1FY22, up 55.25 per cent YoY. The Operating Profit increased by 5.06 per cent to Rs 18,975 crore in Q1FY22 from Rs18,061 crore in Q1FY21. The operating profit excluding exceptional item increased by 14.85 per cent,” the bank said in a statement.

The Mumbai-based lender’s pre-tax profit, on the other hand, stood at Rs 8,922.86 crore for the quarter under study, relative to Rs 5,559.78 crore reported in the same quarter last year. In Q4FY21, PBT was Rs 8,649.12 crore.

On the revenue front, the state-owned lender reported lower-than-expected net interest income (NII) of Rs 27,638 crore, up 3.7 per cent YoY from Rs 26,641.6 crore earned in Q1FY21. On a quarterly basis, the income rose 2.1 per cent from Rs 27,067 crore reported in Q4FY21.

The Street had pegged up to 12 per cent YoY rise in NII on the back of around 8-9 per cent growth in, both, loans and deposits.

SBI’s loan book expansion negatively surprised the Street as it grew 5.8 per cent on year to Rs 25.23 trillion from Rs 23.85 trillion in Q1FY21. The deposits, meanwhile, expanded 8.8 per cent YoY to Rs 37.2 trillion from Rs 34.2 trillion.

“Domestic Credit Growth stood at 5.64 per cent YoY, mainly driven by Retail (Personal) Advances (16.47 per cent YoY), Agri Advances (2.48 per cent YoY) and SME (2.01 per cent YoY),” it said.

The bank added: Including the growth in Corporate Bonds / CPs at Rs 23,346 crore, the loan book has grown by 6.27 per cent YoY. Further, home loan, which constitutes 23 per cent of the bank’s domestic advances, has grown by 10.98 per cent YoY.

Effectively, net interest margin (NIM) came in at 3.15 per cent, down from 3.24 per cent YoY.

Asset quality and provision

The country’s largest state-owned bank’s asset quality worsened sequentially amid the second wave of Covid-19 pandemic.

Its gross non-performing asset (GNPA) ratio stood at 5.32 per cent at the end of Q1FY22, compared with 4.98 per cent at the end of Q4FY21. In Q1FY21, the same was 5.44 per cent.

NNPA, on the other hand, was 1.77 per cent at the end of June, 2021, relative to 1.50 per cent at the end of Q4FY21. At the end of Q1Fy21, it was 1.86 per cent.

Total provisions for the quarter were down to Rs 10,051.96 crore from Rs 12,501.3 crore set aside in the year-ago period and Rs 11,051.03 crore in Q4FY21.

“The Bank has proactively made an additional provision towards the possible impact of Covid-19 pandemic, on the basis of the evaluation and regular assessment. The total provision for Covid-19 uncertainty as on June 30, 2021 is Rs 9,065 crore,” the bank said in a statement.

Provision Coverage Ratio at the end of Q1FY22 is 85.93 per cent, down from 87 .75 per cent as on March 31, 2021. Separately, slippages at the end of Q1FY22 were Rs 15,666 crore. In percentage terms, the slippage ratio is at 2.47 per cent from 0.60 per cent as at the end of Q1FY21

Post result announcement, the stock of the lender rallied nearly 4 per cent and hit fresh record high of Rs 463.2 apiece on the BSE as against a per cent gain in the benchmark S&P BSE Sensex. Moreover, it’s m-cap surpassed Rs 4.13 trillion-mark on the BSE, becoming the fourth lender after HDFC Bank, ICICI Bank, and Kotak Mahindra Bank to achieve the feat.